Outside View: U.S. trade agenda in flux

ATHENS, Ohio, Jan. 20 (UPI) -- Most people in the United States took little or no notice of this past November's presidential elections in Ecuador. Little ink or airtime was dedicated to the selection of the former army colonel that participated in a coup in 2000 to oust the unpopular President Jamil Mahuad. But it may be time to pull out the world atlas for a little geography refresher, because there's a trend afoot to our south that has implications for us here at home.

The army colonel is Lucio Gutiérrez, a populist reformer who bested Ecuador's richest man. Gutiérrez rode into the presidency on a wave of public discontent with the status quo. From the perspective of many Ecuadorians, the status quo equals corruption equals free market fundamentalism equals poverty.

What's most relevant to the United States is the part about markets, and the growing opposition to the economic reforms imposed from Washington: the "Washington Consensus" policies of privatization, deregulation, trade liberalization and lowering public expenditures (on services like education and subsidies of food or oil).

Much of Latin America is thick with resentment toward what is generally perceived as neo-colonial dominance by the United States. Traveling in these largely developing countries, one gets the sense that the International Monetary Fund is akin to a natural disaster that happened to the region, etched in their collective memory.

Luiz Inácio Lula da Silva of the Brazilian Workers' Party is now president of Brazil, home to the world's eighth-largest economy. Lula's solid victory is widely seen as a public rejection of the free market policies that contributed to the economic downfall of Brazil's neighbor and close trading partner, Argentina. Similar political developments are also occurring in Bolivia, Paraguay, Peru and Argentina.

"There is a reason the left is having a resurgence in Brazil and elsewhere in the region: We promised them a rose garden, but even before this latest crisis too many people got nothing but thorns," Princeton economics Professor Paul Krugman wrote in August.

"A decade ago Washington confidently assured Latin American nations that if they opened themselves to foreign goods and capital and privatized their state enterprises, they would experience a great surge of economic growth. But it hasn't happened. And because inequality has increased sharply, most people are probably worse off than they were 20 years ago."

The political changes in South America are largely a repudiation of U.S. influence in the region, and have definite implications for U.S. foreign policy. This was apparent at a recent meeting of the hemisphere's trade ministers, who gathered in Quito, Ecuador, to negotiate the proposed Free Trade Area of the Americas, a trade pact for the 34 nations of the Western Hemisphere, excluding Cuba.

It quickly became apparent in Quito that plans for the FTAA faced serious challenges.

In the streets, 10,000 protesters assailed the trade deal as a threat to farmers, indigenous people, forests and those in poverty. Chants of "Yes to life, no to the FTAA!" and "We don't want to be a North American colony!" rang for hours as the colorful protest march -- led by Ecuador's indigenous and farmer confederations -- snaked through the city.

Behind the police barricades, Latin American governments united around a tough demand that the United States must first commit to the elimination of subsidies on agriculture before talks could advance. Venezuela reiterated their objection to a 2005 deadline for the FTAA's creation, a date that few still take seriously; Brazil indicated that participation in the negotiations did not necessarily mean they would sign any final product.

The FTAA may become a fatality of the failures of the very free trade fundamentalism it seeks to advance, and in fact that may be the best thing for Latin Americans right now.

"I, too, bought into much though not all of the Washington consensus," Krugman confesses, "And my confidence that we've been giving good advice is way down. One has to sympathize with Latin political leaders who want to temper enthusiasm for free markets with more efforts to protect workers and the poor."

Despite our comfort of a stronger economic position in North America, we would be wise to take heed of the political transformation that is underway to our south, as there is a growing likelihood that these nations will soon be charting an economic course of their own. The elections in Brazil and Ecuador serve as a wake-up call for the United States to reconsider its economic intervention in the countries of Latin America.

Further, many of the spectacular failures of Washington-promoted policies in Latin America -- such as the disastrous privatization of social security in Argentina or water in Bolivia -- have their counterparts in recent U.S. experience: the electricity crisis in California and the Enron scandal, both borne of deregulation. A backlash could happen here as well.

-- Jason Tockman is the director of international trade for American Lands Alliance. He is based in Athens, Ohio.

-- "Outside View" commentaries are written for UPI by outside writers who specialize in a variety of important global issues.

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